January 28, 2013
So you have a great idea for a new start-up and your presentation always get a positive reaction, but nobody is willing to take the next step and commit to funding your new business. Venture capitalists might love your presentation and like you as a person, but that doesn’t necessarily mean they want to invest in your business. If you are not seeing results, it could be a sign that something in your approach needs to be changed. Your business plan might be flawed, you might be making common mistakes during your presentation, or maybe you are simply not approaching the right type of investor.
If you have no idea what you are doing wrong, try asking investors for help at your next pitch meeting. They probably don’t have the time to go into a lot of details, but they might be able to point you in the right direction. It’s important to use feedback as a valuable resource for improving your pitch in time for your next meeting. Listening to investors is the best way to figure out exactly what they are looking for. Besides asking for direct feedback, pay attention to questions. The type of questions investors ask can help you figure out what type of information you might be leaving out of your presentation. If you hear one particular question a lot, include it as a point in your next presentation.
Evaluate your business plan for common mistakes. Make sure that it’s formatted correctly and that all of the information venture capitalists need to know about your business is easy to find. Check your financial reports and statistics for accuracy. Inflated numbers are one of the most common problems investors see in business plans from new entrepreneurs. You plan shouldn’t be too detailed or too vague. All of the information in it should give readers a clear understanding of what you are trying to achieve without overwhelming them with too many irrelevant details.
In addition to going over your business plan, work on your presentation. Like your business plan, it should be informative but not too detailed. Practice your pitch over and over again at home until you can run through it smoothly. Remember not to be too pushy or overly confident. You should show just the right amount of confidence, passion and motivation. Otherwise you can come off as impersonal and unapproachable.
The type of venture capitalists you are contacting can be another reason why you are having trouble getting a response. Many venture capitalists look for start-ups that are already operating, and they probably won’t invest in your business if you are building it from scratch. Doing background research on venture capitalists and venture capital firms before contacting them can help you figure out if you are approaching the wrong type of people. Look specifically for investors who are interested in funding new businesses and who are familiar with your field of expertise.